BONN Germany (Reuters) -
The use of carbon markets to curb rising greenhouse gas
emissions was dealt a blow on Sunday after two weeks of
United Nations talks on designing and reforming the
mechanisms ended in deadlock.
The negotiations, held as part of U.N. climate negotiations in Bonn,
Germany, made scant progress as envoys representing almost 200
nations tied reforms to progress under the wider discussions and
remained entrenched in diverse positions.
The stalemate gives investors little sign that there will be a
pickup in demand under the Clean Development Mechanism (CDM), the
U.N.'s current main carbon market which has seen activity dry up
after funnelling over $400 billion into emission-cutting projects in
developing countries over the past decade.
It also offers no guidance on how the growing patchwork of national
and regional carbon markets worldwide will fit into a future
international framework to tackle climate change.
“It is disappointing we didn't move forward,” said Elina Bardram, an
official at the European Commission representing the 28 EU nations
at the talks.
“We believe there is a future for markets ... (but) to agree on
something that wouldn’t be robust enough for us to engage on later
on would just not make any sense,” she told journalists at a
briefing after the talks ended on Sunday.
DIVISIVE MEASURES
Big-emitting businesses and rich nations including the United
States, Japan, and members of the European Union, favour designing
new market-based mechanisms to reduce global greenhouse gas
emissions as cheaply as possible.
Poorer nations have been more wary, particularly as most CDM
investment went to wealthier emerging economies such as Brazil and
China and to industrial gas destruction projects, which generated
healthy profits for companies but led to little sustainable
development and had their environmental integrity questioned.
Negotiations over a raft of CDM reform proposals broke down over
whether to study how to convert the CDM to generate net emission
reductions, rather than merely to generate carbon credits that can
be used by developed countries to offset their emissions.
Efforts to include the option were led by a group of over 40
low-lying island developing nations most at risk of being submerged
by rising sea levels due to global warming.
It was also backed by the EU, which has used the lion's share of CDM
credits to date but wants to scale up global emission reduction
efforts and encourage richer developing countries to pay for their
own emission cuts.
Some other developing nations blocked the move, reflecting a wider
20-year distinction in U.N. climate negotiations that has put the
onus on industrialised nations to curb global greenhouse gas output
because of their historical responsibility for emissions and
capacity to pay.
The deadlock dismayed other poorer nations keen to tap CDM
investment.
"We are disappointed by the lack of progress; the CDM has not yet
seen its way to Africa," said a spokesman for Sudan on behalf of a
bloc of 54 African nations.
In a separate strand of the talks, governments failed to make much
progress on efforts to launch a platform to help set common
standards and accounting rules for reducing emissions and tie
together national and regional emissions trading schemes.
Separate text listing elements of such a platform, referred to as a
"Framework for Various Approaches", was promoted by a group of
richer nations including United States and Japan, which are both
designing their own programmes to use foreign carbon credits.
But this was removed after meeting resistance from developing
nations, which first want rich governments to take on deeper
emission reduction targets at home.
Small island states and the EU are also concerned about advancing
work on the framework without safeguards to assess the environmental
integrity of new schemes, according to negotiators and observers to
the mostly closed-door talks.
The EU, whose preparations towards a new global climate deal have
not included additional demand for foreign carbon credits to 2030,
has been criticised by investor groups for undermining its
leadership role in new carbon market development.
But the EU's Bardram defended the approach. She said the bloc was
committed to developing market-based measures in the long term if
other nations made comparable commitments.
“We do need to allow for a situation to develop whereby other
partners have sufficient ambition for a truly global market to
develop," she said.
The U.N. talks are scheduled to resume at the next negotiating round
in December in Lima, Peru.
(This story corrects paragraph 9 which wrongly said CDM credits
could be offset by developing countries)
